Page 356 - MANUAL OF SOP

Determination of Dumping Margin

computations. The basis of allocation should be as direct as possible
and a reasonable one;
(c) The basis of allocation adopted for allocation or apportionment of
common expenses or joint expenses should be as direct as possible
and a reasonable one;
(d) If more than one products are coming out of any manufacturing
process, where costs can’t be identified, it may be more prudent to
allocate costs on the basis of:
• production value (sales value of the production) basis;

• any other reasonable basis. For example, if all the products
emerging out of any such process have almost similar
volume and value, production quantity method could also be
adopted;
(e) If direct costs constitute a significant portion of overall costs, the
common expenses/overheads not linked to any specific product can
also be allocated in the ratio of product wise direct costs;
(f) Expenses in the nature of Selling Expenses should preferably
be allocated on the basis of turnover of each product of the
company;
(g) In case the Books of Accounts of the producer reflects interest free
loans, due adjustments need to be made in such cases to reflect the
fair cost;
(h) If the entity has done some trading activity or job work during POI,
a proportionate amount of overheads or share of other common
expenses must be allocated to this activity. Similarly, if the corporate
office deals with all organizations within a group, reasonable expenses
must be allocated to all the constituents of the group including
income/investments in group companies. The reasonability of the
basis adopted for allocation must be verified by the investigation
team;
(i) Total costs under respective heads for Allocation of Selling, General
and Administration Overheads as indicated in Appendix-9 should

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